Sensex dips below 20,000; ignores rate cut by RBI

The BSE benchmark Sensex on Tuesday dipped below 20,000 level by losing 112 points on profit selling by investors triggered by lower economic growth projections by RBI even as it cut lending rates by 0.25%.

The Sensex ended lower by 112.45 points, or 0.56%, to 19,990.90.

The gauge touched the day's high of 20,203.66 following interest rate cut announcement, but touched a low of 19,970.05 as the RBI projected a lower economic growth for the current fiscal.

The broad-based National Stock Exchange index Nifty lost 24.90 points, or 0.41%, to 6,049.90, after touching the day's high of 6,111.80.

The Reserve Bank trimmed the economic growth projection for the current fiscal to 5.5%, from 5.8% estimated earlier and said it was necessary to arrest the decline in growth as inflation risks moderate.

The market failed to cheer the RBI's decision to reducing key interest rates by 0.25% and releasing Rs. 18,000 crore additional liquidity into the financial system.

Besides banking stocks, the two index heavyweight with their nearly 17% weightage Reliance Industries and Infosys fell by 1.68%v to Rs. 882.55 and 0.54% to Rs. 2,795, respectively.

Among the lenders, State Bank of India fell by 1.32% to Rs. 2,357.30, HDFC Bank by 2.54% to Rs. 653, Bank of India 4.01% to Rs. 341, Bank of Baroda by 2.64% to Rs. 847.15, Canara Bank by 2.23% to Rs. 471.80, Yes Bank by 1.92% to Rs. 512.25 and Punjab National Bank by 1.45% to Rs. 859.30.

The interest-sensitive realty sector index suffered the most by losing 2.07% to 2,177.77 followed by oil and gas index by 1.35% to 9,299.47. Auto index lost 1.12% to 11,059.84, while Bank index fell by 0.51% to 14,589.39.